In the current position, focus on the boom varieties of chemical cycle, core assets and growth stocks that have been significantly underestimated. We believe that some varieties entering the supply and demand boom cycle have great price elasticity and are the preferred chemical rebound varieties at present; As a high-quality chemical leader with competitive advantages in the whole industrial chain and strong growth certainty, the current valuation and expectation are in the bottom area, and the expected rate of return will increase in the medium and long term; The growth target of upstream new materials related to emerging industries is facing a phased decline in profits in the short term. When the downstream demand stabilizes and rebounds, we expect to usher in the repair of profits and valuation.
[business cycle industry]
1) soda ash: under the expectation of steady growth of real estate, float glass will stabilize the demand for soda ash, and the centralized production of photovoltaic glass and lithium carbonate will drive the incremental demand. There is little new capacity in the industry this year, and the supply and demand will change from tight balance to shortage. Recommendation: Shuanghuan technology, Shandong Haihua Co.Ltd(000822) , Cnsig Inner Mongolia Chemical Industry Co.Ltd(600328) , Sichuan Hebang Biotechnology Co.Ltd(603077) , etc.
2) sulfur and sulfuric acid chain: the global oil and gas price rises sharply, the load of overseas refineries decreases, and the tight supply and demand leads to the rise of sulfur price. However, the global phosphorus chemical industry boom at the demand side is high, which supports the rise of sulfur and sulfuric acid prices. It is recommended that Guangxi Yuegui Guangye Holdings Co.Ltd(000833) .
[phosphorus chemical industry]:
We believe that phosphorus chemical industry is a small number of sub industries in the chemical industry chain that have basically completed the integration of upstream resources and formed integrated development. The downstream is mainly used in the field of agrochemical industry, with strong rigidity, which is a better allocation direction under the background of stagflation. At the same time, it opens the growth of phosphorus and fluorine elements under the trend of new energy. Recommend Guizhou Chanhen Chemical Corporation(002895) , Yunnan Yuntianhua Co.Ltd(600096) , CNOOC Petrochemical (Hong Kong stock), etc.
[growth sector]
1) the leading chemical companies with high-quality growth have been tested for a long time in terms of barriers and competitiveness, with strong core competitiveness and outstanding growth in the future. Recommendations: Wanhua Chemical Group Co.Ltd(600309) , satellite chemistry, Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , etc.
2) new material growth: focus on the upstream new material leader with deep moat and large domestic substitution space. Recommend: semiconductor material leader entering the supply chain of key customers at home and abroad such as SK Hynix and Changjiang storage – Jiangsu Yoke Technology Co.Ltd(002409) ; Sichuan Em Technology Co.Ltd(601208) , a platform manufacturer of new materials with fast and large volume of optical film + special resin, complete industrial chain and rich product reserves.
3) consumption growth: focus on the leader of the whole industrial chain and strong cost transfer ability. Recommend: the leader of the subdivision track of downstream plant capsules (health products & Medicine) and artificial meat (food) – Shandong Head Co.Ltd(002810) ; It is a research and development platform for organic synthesis of Pfizer covid-19 drug, nocytol, Deanxit and other first-line drug intermediates – Great Chinasoft Technology Co.Ltd(002453) .
Risk warning: the macroeconomic growth rate is lower than expected; The product price fluctuates greatly; International oil prices fell sharply; The construction progress of new projects is less than expected; Repeated outbreaks, etc.
